People in Cyprus with less than 100,000 euros in their accounts will have to pay a one-time tax of 6.75%, Eurozone officials said. Those with greater sums will lose 9.9%. Cypriot bank officials quoted by AP news agency said depositors could access all of their money except the amount set by the levy.

I hope this is not the beginning of a trend. To wake up and discover that 9.9% of your savings are gone would devastate me.

This is probably a small test run, before it is attempted on a larger scale, perhaps in Italy or Spain. A tax on wealth, which directly benefits the elite. If this goes down peacefully, we'll see it again.

BEEFjerKAY

Pics?

posted: Mar. 16, 2013 @ 10:47a

My response to a PM I received on why I gave this red ...

There's always some marginal country somewhere doing this kind of thing.

It's hardly news.

It's hardly meaningful.

It's hardly indicative of any kind of trend.

I'm willing to bet most folks who are scared by such news can't even find Cyprus on a map, much less understand any of the 50 years of history that have led to this recent announcement.

edit:this is more of a statement on the financial state of Russian oligarchs than any thing else.

If I had to choose a macro global trend to be concerned about, it would be China.

Eurozone banking system is not at all similar to the US.

HawkeyeNFO

Senior Member - 2K

posted: Mar. 16, 2013 @ 10:55a

BEEFjerKAY said: ....There's always some marginal country somewhere doing this kind of thing.....It's hardly indicative of any kind of trend....

Not sure what you are trying to say, but if there's always some country doing this, that to me sounds like a trend. Agree that Cyprus is not a huge country or economy itself, but has this occurred in a eurozone country before? That to me is the telling piece of this. That the beneficiary is a central bank (and those who directly profit from that bank) located hundreds of miles away in a different country.

BEEFjerKAY

Pics?

posted: Mar. 16, 2013 @ 11:01a

HawkeyeNFO said: That the beneficiary is a central bank (and those who directly profit from that bank) located hundreds of miles away in a different country.

If you go back over the past 50 years, or at least past Bretton Wood and perhaps further, you will find that is almost always the case.

It worked the same way with the Weimar Republic.

I'd have to check, but I think the Medici operated in much the same way.

The real story is how Cyprus got co-opted by Russian mafia into the financial equivalent of a narco-state.

In a radical departure from previous aid packages - and one that gave rise to incredulity and anger across the country - euro zone finance ministers forced Cyprus' savers to pay up to 10 percent of their deposits to raise almost 6 billion euros....The deposit levy - set at 9.9 percent on bank deposits exceeding 100,000 euros and at 6.7 percent on anything below that - will take force on Tuesday after a bank holiday on Monday.There's a lot of unique circumstances here related to Cyprus serving as off-shore for Russian money, but the fact remains a fact: at the whit of some bureaucrats money are being confiscated extra-judiciously.

I think it's a penny-wise solution, will cost European banking system dearly in the long run.

And yes, it gives an ammunition to FIAT critics and gold bugs

BEEFjerKAY

Pics?

posted: Mar. 16, 2013 @ 11:05a

neophyte said: And yes, it gives an ammunition to FIAT critics and gold bugs

You've really got to start reading the part of the news paper that displays the actual price of gold in <gasp> fiat currency.

HawkeyeNFO

Senior Member - 2K

posted: Mar. 16, 2013 @ 11:12a

BEEFjerKAY said: HawkeyeNFO said: That the beneficiary is a central bank (and those who directly profit from that bank) located hundreds of miles away in a different country.

If you go back over the past 50 years, or at least past Bretton Wood and perhaps further, you will find that is almost always the case.

It worked the same way with the Weimar Republic.

I'd have to check, but I think the Medici operated in much the same way.

The real story is how Cyprus got co-opted by Russian mafia into the financial equivalent of a narco-state.

Concur. In fact this has been going on for well over 100 years. Lots of books have been written about how the elite use central banks (like the Federal Reserve) to to manipulate the wealth of the public to benefit a small cadre of elites. Speaking of the Russians, it was bankers in the US who funded the bolsheviks early last century.

BEEFjerKAY

Pics?

posted: Mar. 16, 2013 @ 11:13a

Response i gave to another PM i received ...

Then think about this ...

Not why you hadn't heard about this news, but why haven't you been anticipating this news.

The Russian mob has been treating Cyprus like the New York mafia families treated pre-Castro cuba.

BEEFjerKAY

Pics?

posted: Mar. 16, 2013 @ 11:19a

HawkeyeNFO said: Speaking of the Russians, it was bankers in the US who funded the bolsheviks early last century.

If you are going to publish anti-Semitic crap at least have the courage to not post it in code.

Didn't you mean to say it was "jewish bankers in the US who funded the bolsheviks"?

neophyte

Addicted Member

posted: Mar. 16, 2013 @ 11:25a

BEEFjerKAY said: I'm willing to bet most folks who are scared by such news can't even find Cyprus on a map, much less understand any of the 50 years of history that have led to this recent announcement.Educate me, even being familiar with 3000 years of Cyprus didn't reveal me why

BEEFjerKAY said: this is more of a statement on the financial state of Russian oligarchs than any thing else. That is about 50% true, but the other 50% it's Cypriot's money. BTW if you want to hurt Russian oligarchs - accessing 10% surcharge on all assets and properties held in London would work even better

BEEFjerKAY said: If I had to choose a macro global trend to be concerned about, it would be China.Agree, the "communist" China offers now better market economy that Western Europe

BEEFjerKAY said: Eurozone banking system is not at all similar to the US.Oh, not at all - our Bretton Wood is different from theirs, our FIAT currency called dollar, theirs called Euro, our exchanges are not cross-owned and not integrated with European; our JP Morgans are completely distinct from theirs, even our Basel rules are not that Basel

neophyte said: BTW if you want to hurt Russian oligarchs - accessing 10% surcharge on all assets and properties held in London would work even betterDon't be naiive.Do you think the buerocrats didn't tip off the oligarchs a few days earlier?

I remember a couple of decades ago, India's largest government owned mutual fund surprised everyone with huge losses and devalued their units. It just so happened that some large corporations redeemed their units a few days prior (to the tune of billions). The poor people (who were led to believe that the government owned fund will at least preserve their capital) lost a major chunk of their savings.

SomeOtherChick

Senior Member

posted: Mar. 16, 2013 @ 12:06p

Cyprus is an offshore banking mecca. Many of the largest accounts do not belong to residents of Cyprus, or if they do its in name only.

GotRocks

Senior Member

posted: Mar. 16, 2013 @ 12:25p

I live in Cyprus (I moved here 2 and a half years ago) and this action has just cost me about $5500. I am FURIOUS! Thank god I did not exchange my $ for Euros last year when the Euro was about $1.2 (there was lots of talk about Greece leaving the Euro, and where Greece goes, Cyprus soon follows).

The way this is being enacted is pure unadulterated theft. Monday is a holiday here in Cyprus. It was announced this morning (Sat) when all the banks are closed. ATMs are out of service. The crap will hit the fan on Tuesday.

The Cyprus economy is not good and this action is hurting all the British expat pensioners and the middle class Cypriots and me (I don't fall into either of those categories). People will curb their spending even more because the gov just confiscated this money. Unemployment will rise because people will not be spending money. More Brits will pack up and go home and unemployment will rise some more. All this because of Cyprus' exposure to Greek banks.

Don't be surprised when this is enacted in the US (there has been talk). I think a trip to Switzerland is in order shortly.

BostonOne

Senior Member - 2K

posted: Mar. 16, 2013 @ 12:36p

The Argentinian economy is much larger than Cyprus and their economic shock, debt default and freezing of bank accounts did not have a major widespread impact. Don't assume a trend from a country that has about the 100th largest GDP.

burgerwars

just a salad for me

posted: Mar. 16, 2013 @ 12:36p

Suddenly stuffing all your money in a mattress, or burying it in the backyard, is the safest investment.

tolamapS

Silly Member

posted: Mar. 16, 2013 @ 12:38p

BEEFjerKAY said: My response to a PM I received on why I gave this red ...

There's always some marginal country somewhere doing this kind of thing.

It's hardly news.

It's hardly meaningful.

It's hardly indicative of any kind of trend.

I'm willing to bet most folks who are scared by such news can't even find Cyprus on a map, much less understand any of the 50 years of history that have led to this recent announcement.

edit:this is more of a statement on the financial state of Russian oligarchs than any thing else.

If I had to choose a macro global trend to be concerned about, it would be China.

Eurozone banking system is not at all similar to the US.

While Cyprus might sounds like a marginal country, I think a more thorough analysis would reveal the following:

- prior to the crisis, Cyprus was far more affluent country, far more developed than Greece, the other Greek-speaking country,- Cyprus was somewhat of a banking center, where people outside of Eurozone would park their money (e.g., Russians),- Cyprus was deemed to be immune from the type of problems that Greece (or Portugal, or Spain, or Italy, would later run into),

Would you call Switzerland, or Finland, unimportant countries? It depends on your situation, circumstances, or perspective, right?

So why is this important? I would say that in the world of FatWallet Finance, this piece has some tiny, but nevertheless significant importance, and I appreciate reading this. Far more so, than, say reading about the umpteenth refinance problem, umpteenth "I got $8K in inheritance, what should I do", and umpteent "My neighbor cut my tree, to sue or not to sue".

BEEFjerKAY

Pics?

posted: Mar. 16, 2013 @ 12:42p

ssgcinty said: The poor people (who were led to believe that the government owned fund will at least preserve their capital) lost a major chunk of their savings.

Through out the ages, the poor have really had one and only one role ... to be screwed by the rich.

tolamapS

Silly Member

posted: Mar. 16, 2013 @ 12:42p

GotRocks said: I live in Cyprus (I moved here 2 and a half years ago) and this action has just cost me about $5500. I am FURIOUS! Thank god I did not exchange my $ for Euros last year when the Euro was about $1.2 (there was lots of talk about Greece leaving the Euro, and where Greece goes, Cyprus soon follows).

The way this is being enacted is pure unadulterated theft. Monday is a holiday here in Cyprus. It was announced this morning (Sat) when all the banks are closed. ATMs are out of service. The crap will hit the fan on Tuesday.

The Cyprus economy is not good and this action is hurting all the British expat pensioners and the middle class Cypriots and me (I don't fall into either of those categories). People will curb their spending even more because the gov just confiscated this money. Unemployment will rise because people will not be spending money. More Brits will pack up and go home and unemployment will rise some more. All this because of Cyprus' exposure to Greek banks.

Don't be surprised when this is enacted in the US (there has been talk). I think a trip to Switzerland is in order shortly.

Having come from former Soviet Union, I agree that this was a piss-poor way of handling things. The amount of damage that the Cypriot economy will take because of this one single action is simply unimaginable.

Transparent, well-functioning banking system is the foundation of a capitalist economy. When the government directly attacks the safety of that foundation in a very sneaky way, essentially backstabbing people, that is bad.

BEEFjerKAY

Pics?

posted: Mar. 16, 2013 @ 12:45p

tolamapS said: Would you call Switzerland, or Finland, unimportant countries? It depends on your situation, circumstances, or perspective, right?

Perhaps.

But Cyprus had allowed itself to become puppet of the Russian mob.

What happens in Cyprus is more likely to be a trend for Isle of Man, and similar off-shore havens, if that.

Few tears will be shed.

RealEstateMatt

Happy Member

posted: Mar. 16, 2013 @ 12:47p

BostonOne said: The Argentinian economy is much larger than Cyprus and their economic shock, debt default and freezing of bank accounts did not have a major widespread impact. Don't assume a trend from a country that has about the 100th largest GDP.

What happens in Cyprus is more likely to be a trend for Isle of Man, and similar off-shore havens, if that.

Few tears will be shed.Cayman Islands as well?

jeeves

Ask me anything

posted: Mar. 16, 2013 @ 1:09p

We can print our way out, so that it won't appear to be this blatent.

snork615

Senior Member

posted: Mar. 16, 2013 @ 1:51p

US regime can use this social experiment as a test of plans to tax the "rich". Bernanke and those who control him are watching closely. Better than zero interest rates for their goals of eliminating the saving class.

SUCKISSTAPLES said: BEEFjerKAY said: Isle of Man, and similar off-shore havens, if that.

Few tears will be shed.Cayman Islands as well?

Perhaps. Caymans are much less important now than 20 years. US overseas bank account reporting rules combined with corporate tax loophole have made places like Ireland much more important for the legitimate money.

And illegal money has become so toxic from a regulatory compliance perspective, it's much less profitable than it used to be.

So pretty much you have to make a choice as to whether you want to be a legitimate banker or part of the shadow economy ... which is where Cyprus essentially went.

Perhaps the profitability of illegal money banking will change if and when interest rates go back up. Hard to say.

If I have a choice of {1 out of million being blown up by a terrorist bomb}, or {1 out of a thousand being picked up by the radar of the intelligence analysts}, I'd rather take my chances with the terrorist.

The funny (or sad) thing is, the fact that they are going to scour the financial records does not reduce my chances of being blown up by terrorist bombs.

tolamapS

Silly Member

posted: Mar. 16, 2013 @ 2:09p

BEEFjerKAY said: ssgcinty said: The poor people (who were led to believe that the government owned fund will at least preserve their capital) lost a major chunk of their savings.

Through out the ages, the poor have really had one and only one role ... to be screwed by the rich.

With the only small exception that occasionally they pick up forks and pitches, and behead some of the rich arbitrarily.

dshibb

Senior Member - 7K

posted: Mar. 16, 2013 @ 2:10p

I don't get the negativity towards this post at all. You just had a Eurozone country assess a windfall tax on it's depositor base because of their sovereign debt situation and you have other countries that are still in a rough position. I don't understand how you can say that this isn't worthy news.

Sorry BEEFjerKAY, but this is not something that should be ignored completely especially when you have people talking about the Eurozone problems being a thing of the past when they've largely fixed nothing and only kicked the can down the road.

BEEFjerKAY

Pics?

posted: Mar. 16, 2013 @ 2:11p

To their defense, the single most effective aspect of the war on terrorism has been the tracking of cross-border money laundering.

But I don't fathom the need or rationale behind the latest effort. Simply boggles my mind. I may see if I can get a briefing.

HawkeyeNFO

Senior Member - 2K

posted: Mar. 16, 2013 @ 2:30p

BEEFjerKAY said: HawkeyeNFO said: Speaking of the Russians, it was bankers in the US who funded the bolsheviks early last century.

If you are going to publish anti-Semitic crap at least have the courage to not post it in code.

Didn't you mean to say it was "jewish bankers in the US who funded the bolsheviks"?

Now that's some crap. I don't know the religion of JP Morgan or the Rockefellers, and I really don't care. The Jewish banking conspiracy theories have been shown to be crap as well. Time to take a good hard look at history before making accusations, Beefy.

As I said, this kind of thing has been going on for over 100 years, and actually much longer than that. Take a look at what happens to those who dare to challenge the authority of central banks. It ain't pretty.

dshibb

Senior Member - 7K

posted: Mar. 16, 2013 @ 2:36p

Let's also not forget that it was the Eurozone's unelected A-holes that suggested to do this. It wasn't some podunk socialist country in Africa that decided to do this on their own. This was *supposedly* some of the smartest technocrats in the world who demanded this in exchange for bailout money.

And the real value of this conversation isn't about whether or not it was a good form of austerity. Maybe it is, maybe it isn't.

It's that the Eurozone crisis isn't over. If they're still forced to take radical actions like this than you know that these problems are going to come roaring right back.

And the real problem here is that depositor flight out of Cyprus is going to be huge and it could cause flight once again out of Greece. That means these financial institutions have to get their liquidity from the ECB, they'll have to drop even more risk assets and buy more $hitty debt in their own sovereign to post as collateral for that liquidity, they get more wedded to their governments, and the binds that hold the Eurozone together get more fractured.

dshibb

Senior Member - 7K

posted: Mar. 16, 2013 @ 4:05p

I seriously think that they're going to rue the day they decided to do this. It's not just that this happened in Cyprus. It's that the very same people who demanded it in Cyprus are the same people who can demand it on Greece, Italy, Portugal, or Spain. If you're a depositor in any of those countries who came back to capture a slightly higher yield in Greece than in Germany, I don't see how you take a look at something like and ask yourself whether it's worth maybe 25 basis pts a year to not only have your money in a country that could at some point in the future leave the Euro, but one that could be forced by the very same people to impose a tax on my deposits. If deposit flight re enters the Eurozone you're right back into the crisis once again.

The truth is that I think these people got cocky. They thought they had beaten this thing and no longer had to take as serious steps to protect their banking system. While likely no where near the amplitude this could have been the Eurozone's Lehman moment that starts a bunch more bank runs.

Now I'm of the mindset that this kicking the can down the road is only making matters worse so anything that results in them finally being forced to decide fiscal union(not going to happen) or a couple countries exiting the Euro I think is a good thing, but that isn't what they wanted so yeah I could see this being the spark that sets off another chain reaction. It's hard to say because it requires predicting the qualitative mindset of participants and what is enough of a shock to cause them to run, but I wouldn't be surprised if this is it.

gruntwork

Ancient Member

posted: Mar. 16, 2013 @ 4:19p

Why wouldn't this action cause a 'run on the bank' next time these Eurozone finance ministers are deciding the fate of yet another euro country.

This is an article from a local paper here in Cyprus. Note that this man has only been president for 15 days. The previous president, a communist, did not run for re-election.

We've had the following actions in Cyprus in the past 3-4 months:

VAT increased from 17%to 18% (that followed a previous VAT increase from 15% to 17% about a year ago)0.03 Euro per liter increase in gasoline taxes

Cyprus unemployment is already high. This year we have had record numbers of families unable to feed themselves or pay their exorbitant electric bills.

There is a large British expat population here, mostly retirees, who have moved their life savings here or at least a good portion of it. The British have been leaving over the past 2 years because the pound to Euro exchange rate is not as favorable as it was in the past. This is going to drive more of them back to the UK.

This whole thing is a huge disaster. And this action, whether stated so or not, was because of the huge amount of Russian money here in Cypriot banks.

The bank I use is not one of the two banks (Bank of Cyprus and Laiki Bank) that are going under. Now I will have shares in these two banks (not sure how I will deal with that as I wonder if I can technically even own these shares as a non-EU citizen.

beethovengirl

Senior Member - 2K

posted: Mar. 16, 2013 @ 5:00p

HawkeyeNFO said: BEEFjerKAY said: HawkeyeNFO said: Speaking of the Russians, it was bankers in the US who funded the bolsheviks early last century.If you are going to publish anti-Semitic crap at least have the courage to not post it in code.

This is an article from a local paper here in Cyprus. Note that this man has only been president for 15 days. The previous president, a communist, did not run for re-election.

We've had the following actions in Cyprus in the past 3-4 months:

VAT increased from 17%to 18% (that followed a previous VAT increase from 15% to 17% about a year ago)0.03 Euro per liter increase in gasoline taxes

Cyprus unemployment is already high. This year we have had record numbers of families unable to feed themselves or pay their exorbitant electric bills.

There is a large British expat population here, mostly retirees, who have moved their life savings here or at least a good portion of it. The British have been leaving over the past 2 years because the pound to Euro exchange rate is not as favorable as it was in the past. This is going to drive more of them back to the UK.

This whole thing is a huge disaster. And this action, whether stated so or not, was because of the huge amount of Russian money here in Cypriot banks.

The bank I use is not one of the two banks (Bank of Cyprus and Laiki Bank) that are going under. Now I will have shares in these two banks (not sure how I will deal with that as I wonder if I can technically even own these shares as a non-EU citizen.They started all this crap to collect $6billion?

I'm going to guess this is going to have a negative impact far exceeding that sum

Skipping 267 Messages...

dshibb

Senior Member - 7K

posted: Apr. 23, 2013 @ 2:57p

BostonOne said: dshibb said: BostonOne said: dshibb said: BostonOne said: dshibb said: I love how a couple posters thought this was no big deal because Cyprus is just some podunk country and this is the biggest news today all over the world.

So much for the notion that this was unimportant.Thinking it's not a big deal in the long run is different than whether the story will make headlines or roil markets for a few days.

Do you want to bet on Italian sovereign bond yield compression after this?

For this to be true you would have to believe that the moves in the peripheral sovereign debt markets that started with the Italian elections and are now accelerating on the news out of Cyprus represent only a temporary occurrence that prudent investors should just capitalize on by buying up 10 year BTPs right now. I think you would be hard pressed to find investors that are more inclined to buy peripheral sovereign debt today all because Italian debt now represents a slightly better value.

Same goes for European bank stocks or European bank debt.Looks like Italian bond yields continue to fall despite the shenanigans in Cyprus.

Look at some of the subordinated debt of some of these banks once and you'll see something else.My point is that the sky is not falling because of what happened in Cyprus, and that the price of Italian bonds increased right after the incident. Investors obviously did not have a problem buying the sovereign debt post-Cyprus.

Did I say the sky was falling? I said that the problems aren't solved and going to get worse. The balance sheets of banks in Europe continue to deteriorate and you'll see this crisis get worse when those institutions need to be bailed out and have their bad debt put on the public balance sheet. It's all a function of 2 things A) When a bank runs out of eligible collateral for the ECB and B) When the ECB will cut off the ELA. For all we know a few European banks already should have been cut off the ELA and the ECB is just waiting for the right time to do it.

So again if your comfortable investing money in Eurozone banks and sovereign credit be my guest. But I'm not that crazy. And maybe this thing get's kicked out another year or 2. It still doesn't change that they haven't dealt with it yet and each time something like Cyprus happens it's gets much harder on them because haircuts at once place affect other players, liquidity flight in response hampers other players, etc.

Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Members of our community may attach files to a post in accordance with the User Agreement. FatWallet is not responsible for the content, accuracy, completeness or validity of any information contained in any attached file. Files have *not* been scanned for viruses. Be especially wary of Excel files which may contain malicious content.

FatWallet coupons help you save more when shopping online. Use our Coupons Search to browse coupons and offers from thousands of stores, gathered into one convenient location.

Forums
As part of our FatWallet Community, you can share deals with almost a million shoppers in our forums. Forum content is generated by consumers for consumers. Share deals, money-saving tips, and more. It's FREE, fun, and addicting.

Support
Our customer experience team is here around the clock - real people ready to assist.